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Comparative Implementation of EU Directives (I): Insider Dealing and Market Abuse

The Institute has produced a report on the comparative implementation of the key provisions of the Insider Dealing Directive and the equivalent articles of the Market Abuse Directive in five EU Member States (the UK, Germany, France, Spain and the Netherlands). The report was commissioned by the City of London and published in December 2005. Prepared by a team of lawyers under the direction of Jane Welch, Director of the European Financial and Corporate Law Centre at the Institute, it provides a detailed commentary on implementation in each of the selected jurisdictions.

Comparative Implementation of EU Directives provides an insight into the realities of transforming EU directives into national regulation. The results of the earlier implementation of the Insider Dealing Directive were very mixed, with wide variations in national law.

The results of the more recent implementation of the Market Abuse Directive have been more homogeneous, partly because of the more prescriptive nature of the directive itself and partly because countries have moved closer to straight transposition into domestic law when implementing the Directive. Even in the second case, however, the report makes clear that there is still scope for variation in practice, not least because national regulators and courts are likely to interpret key concepts in different ways.

Michael Snyder, Chairman of the Policy and Resources Committee, Corporation of London said: "Implementation is more of a challenge than is often first thought. EU Member States have different legal systems and different regulatory structures. There are also problems of language which can result in critical words having very different meanings in different places. Even if the temptation to "gold plate" is resisted and each country starts the process of implementation by attempting the literal transposition of a directive into national law, the results can still be very different.

If the report proves one general point, it is simply that there are no easy victories in providing Europe with a completely level playing field in the area of financial services regulation. I believe that the report provides a fascinating case study not only into the challenges of implementation, but also into the need for care in drawing up the directives themselves. I trust that this study will serve as a model for other work of a similar nature, and that it will contribute to gathering momentum behind the campaign for better regulation a campaign that must produce solid gains if we are to meet the demanding international competitiveness aspirations of the Lisbon Agenda".

The full report can be found here.

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